BT’s Bryan Ashenden has encouraged advisers to remain aware of the Financial Services and Credit Panel’s (FSCP) four latest determinations against relevant providers.
The FSCP is a pool of industry participants, appointed by the responsible minister, that ASIC draws upon when forming individual sitting panels. It operates separately from, but alongside, ASIC’s existing administrative decision-making processes.
Over the past three months, the panel has made four determinations against relevant providers of advice.
Speaking on a BT webinar, Bryan Ashenden, head of financial literacy and advocacy at the firm, emphasised that it is important for advisers to stay updated on these regulatory announcements.
“There have been some recent decisions that have come out from the FSCP – four since the beginning of July. What’s important out of these is to know where there have been potential issues raised, because we need to remember: something goes to the FSCP if ASIC believes there is a potential issue that warrants some form of sanction to be imposed. The FSCP then does its review, an investigation, and makes a recommendation,” Ashenden said.
“It is worth being aware of the issues that have been passed through to the panel and what decisions they came to, as these are based on the issues that are happening across the [advice] industry at the moment.”
Out of the four recent FSCP determinations, one case resulted in a written direction, one saw a warning issued, and two had no further action taken.
Written direction
On 30 July, the panel issued a written direction to a relevant provider after they “failed to accurately identify the clients’ goals, failed to make reasonable inquiries to obtain complete and accurate health information for one client, failed to consider the insurance information in relation to one client, and failed to consider the risk profiles of the clients”.
The failures listed, the FSCP said, constituted contraventions of s961B, s961G and s947D of the Corporations Act. This saw the relevant provider receive specified supervision from an independent compliance professional at their own cost and audit the next 10 pieces of advice that they intend to present to a retail client.
Warning issued
On 5 August, the panel issued a warning to a relevant provider after they had contravened the Corporations Act by failing to provide a statement of advice (SOA) after giving personal advice to the client and instead used a record of advice (ROA).
Ashenden explained: “They issued a reminder essentially to everyone that you can use ROAs where the advice has been issued under your current licensee, not where it was issued under a previous licensee. Then you would need to put in place an SOA in order to do that.”
No action taken
The FSCP’s two latest determinations, made on 26 August and 28 August, saw no action taken against the respective relevant providers.
The first case was referred to the panel as there were concerns that the adviser had breached conflicted remuneration and best interest duty within the Corporations Act and had breached the code of ethics.
The second matter, two days later, related to a relevant provider where the panel was concerned it had failed to comply with continuing professional development requirements.
Commenting on this determination, Ashenden said: “All advisers have got that 40 hours per annum CPD requirement and technically, if you don’t meet that, you can be removed from the FAR. Effectively, you are not allowed to provide advice.”
However, the FSCP took no action as the relevant provider was able to provide evidence that they had exceptional circumstances.
